16 CFR Part 455 Used Motor Vehicle Trade Regulation Rule; Project No. P087604
Require Warranty Disclosure on Face of Buyer's Guide. According to the proposal, dealers could post information regarding an existing manufacturer warranty on the back of the Buyer's Guide form where consumers are unlikely to see it. This key information should be visible on the face of the window sticker where a consumer is likely to see it. Notably, in most scenarios, the Buyer's Guide must be affixed to the interior side of the motor vehicle window, making it impossible for a consumer to see the back side display when approaching the vehicle. Most consumers do not expect crucial information to be placed on the back side of a window sticker. Remove FTC Endorsed Advice regarding "As Is" Sale. The proposed language requires dealers to provide misleading verbiage regarding the meaning of an "As Is" sale. The proposed language is contrary to existing case law, which provides that even when vehicles are sold "As Is," this is not a shield against fraud. The proposed language is thus worse than the existing language under the rule. Existing Language: AS IS = NO WARRANTY. YOU WILL PAY ALL COSTS FOR ANY REPAIRS. The dealer assumes no responsibility for any repairs regardless of any oral statements about this vehicle. Proposed Language: AS IS - NO WARRANTY. THE DEALER WON'T PAY FOR ANY REPAIRS. The dealer is not responsible for any repairs, regardless what anyone else may tell you." This may have the detrimental effect of discouraging consumers with valid fraud claims from seeking advice from consumer advocates, state attorneys general, or other advocacy groups. Require Pre-Sale Inspection. The FTC should also require dealers to inspect a vehicle prior to sale to evaluate its condition. Currently, there is no such requirement and dealers do not even have to evaluate whether a vehicle is safe to drive before selling it and allowing a consumer to drive into onto the public roadways. Require Disclosure of Known Defects. At a minimum, dealers should be required to disclose any know defects in a vehicle prior to sale. These items are necessary to provide just a modicum of protection to purchasers of used vehicles. Motor vehicle dealers are at a distinct advantage to know of defects affecting a motor vehicle. Dealers should be required to check the National Motor Vehicle Title Information System ("NMVTIS") or disclose the results of any vehicle history reports to consumers. This burden should not be placed on consumers who typically lack access to computers when they are on the car lot shopping for vehicles, and have to pay exponentially more than dealers to access the information. Notably, many financial disadvantaged consumers cannot access the information at all, due to the practical reality of the lack of access to credit (a credit card is required to access a vehicle history report).